The Latest Earnings From LendingClub, Rackspace, MaxLinear, Nortek, and Nuance Have Investors Talking

Rackspace Guidance Also Disappoints

The hedge funds in our database were also selling out of Rackspace Hosting, Inc. (NYSE:RAX) and several other cloud computing stocks during the first quarter. That has proven to be unwise in Rackspace’s case, as its shares have gained over 30% since March 31, largely from the recent takeover rumors surrounding it. Shares have dipped by 2% in pre-market activity however, as tepid guidance offset solid second quarter results reported yesterday. Adjusted earnings for the quarter came in at $0.38, trouncing estimates of $0.22, while revenue of $523.6 million also slightly topped estimates and represented a 7% year-over-year increase. However, third quarter guidance for sales of $510 million-to-$515 million came in below estimates of $525 million. Paul Hondros’ AlphaOne Capital Partners initiated a 120,400-share stake in Rackspace Hosting, Inc. (NYSE:RAX) during the first quarter.

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Weak Results Out of Nortek

Nortek Inc (NASDAQ:NTK) widely missed top- and bottom-line estimates with its second quarter results yesterday, as its EPS of $1.14 and revenue of $685.10 million came $0.27 and $30.10 million short of expectations respectively. The heating and air conditioning company’s shares have been unaffected by the poor results this morning however, as it’s poised to be acquired by Melrose Industries for $2.8 billion. Shares of Nortek did slip slightly yesterday as the window shopping period of its proposed deal expired without any other offers, removing any possibility of a bidding war for the company. Jeffrey Gates‘ Gates Capital Management owned 3.11 million shares of Nortek Inc (NASDAQ:NTK) on March 31, valued at over $150 million.

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Nuance Communications Wraps Solid Quarter

Nuance Communications Inc. (NASDAQ:NUAN) shares are up modestly this morning following the announcement of its third quarter of fiscal year 2016 results yesterday. The voice recognition and language solutions company delivered adjusted earnings of $0.38 for the fiscal quarter, beating estimates by $0.01, while its top-line of $484.90 million missed estimates of $490.40 million. Non-GAAP operating margin improved by 80 basis points year-over-year, while non-GAAP EPS experienced a $0.06 improvement. Nuance announced the acquisition of TouchCommerce on July 21, and believes that its digital customer service solutions will integrate effectively with its own offerings to help meet the varied service needs of its customers. Columbus Circle Investors held a 2.77 million-share position in Nuance Communications Inc. (NASDAQ:NUAN) on June 30, having cut the size of its position by 35% during the second quarter.

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